When inequality gets too extreme, then it becomes useless for growth, and it can even become bad because it tends to lead to high perpetuation of inequality over time and low mobility.
Interpretation
Extreme inequality can hinder growth and perpetuate further inequality, limiting social mobility.
This quote by Thomas Piketty illustrates the detrimental impact of severe inequality on economic growth and social mobility. When wealth and resources are disproportionately distributed, it not only stifles development but also creates a cycle that makes it increasingly difficult for individuals to improve their socio-economic status, leading to a stagnation of opportunity and potential.
In practice
In a keynote speech on economic policy, consider using this quote to highlight the risks of ignoring inequality.
Contrary to a tenacious myth, France is not owned by California pension funds or the Bank of China, any more than the United States belongs to Japanese and German investors. The fear of getting into such a predicament is so strong today that fantasy often outstrips reality. The reality is that inequality with respect to capital is a far greater domestic issue than it is an international one.
The main force pushing toward reduction in inequality has always been the diffusion of knowledge and the diffusion of education.
Over a long period of time, the main force in favor of greater equality has been the diffusion of knowledge and skills.
There is one great advantage to being an academic economist in France: here, economists are not highly respected in the academic and intellectual world or by political and financial elites. Hence they must set aside their contempt for other disciplines and their absurd claim to greater scientific legitimacy, despite the fact that they know almost nothing about anything.
When the rate of return on capital exceeds the rate of growth of output and income, as it did in the nineteenth century and seems quite likely to do again in the twenty-first, capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based.
Having a decent share of the national wealth for the middle class is not bad for growth. It is actually useful both for equity and efficiency reasons.
Why do we fully tax some kinds of income from capital, like interest and dividends; partially tax other kinds like capital gains; defer tax on other kinds, like IRAs; and impose no tax at all on still other types of capital income, like interest on municipal bonds? This simply is not rational. These distinctions don't have any inherent logic.
There is no easy fix or youth unemployment. Partnership between the public and private sectors can make a big difference.
If you feed enough oats to the horse, some will pass through to feed the sparrows (referring to "trickle down" economics).
Government-to-government foreign aid promotes statism, centralized planning, socialism, dependence, pauperization, inefficiency, and waste. It prolongs the poverty it is designed to cure. Voluntary private investment in private enterprise, on the other hand, promotes capitalism, production, independence, and self-reliance.
Sector-specific price declines, uncomfortable as they may be for producers in that sector, are generally not a problem for the economy as a whole and do not constitute deflation.
Raising the minimum wage allows business people to stop thinking about workers simply as costs to be cut and allows you to start thinking about workers as customers to be cultivated.
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